Miner Company
The Fed Is Bracing For An AI Bubble Burst And Global Stagflation
The Fed's 2026 severely adverse scenario, with a 54% fall in the stock market, could be triggered by "an abrupt decline in risk appetite," that is, an AI bubble burst with a negative wealth effect. Even the Fed's baseline scenario implies lackluster S&P 500 returns, forecasting only 4.3% annual equity growth through 2029, barely above T-bills.
The Fed's 2026 severely adverse scenario, with a 54% fall in the stock market, could be triggered by "an abrupt decline in risk appetite," that is, an AI bubble burst with a negative wealth effect. Even the Fed's baseline scenario implies lackluster S&P 500 returns, forecasting only 4.3% annual equity growth through 2029, barely above T-bills.